RegTech data consists of information collected and used in the financial regulatory system. But the system for reporting this information in the U.S. is reliant on document-based reports. Having information in static documents limits the ability of regulators and private sector entities to deploy and benefit from emerging technologies, like machine learning and artificial intelligence (AI).
AI is already in use across the commercial, healthcare, and defense industries, but it has not yet been widely applied in the U.S. federal government. But we’re starting to see that change. Federal lawmakers are considering promising strategies to deploy technologies to effectively leverage the government’s data assets in order to support technologies like AI. Congress is taking steps towards encouraging more government adoption of AI solutions. Executive Branch agencies are considering how to apply AI to achieve their missions, but there are still foundational policy issues that must be addressed to ensure the platform for applying innovative technologies exists within government, including improvements to the data quality and the adoption of open data standards, that AI relies heavily on to function properly.
Proposals such as the Financial Transparency Act that would require the adoption of a non-proprietary, legal entity identifier and other laws, like the OPEN Government Data Act that require standardized, machine-readable data are helping to set the stage for modernizing federal data and the financial regulatory reporting system. This, in turn, fosters an environment for technologies like AI to improve the efficiency of the financial sector and regulatory reporting. Requiring U.S. financial regulators to adopt consistent data fields and formats for information collected from the industry can help bring the full benefits of AI to the RegTech sector.
Better standardization of regulatory reporting requirements across the agencies would significantly improve the ability of the U.S. public sector to understand and identify the buildup of risk across financial products, institutions, and processes. Having good quality, standardized data is an important steppingstone to reaping the benefits of the ongoing digitization of financial assets, digitization of markets, and growing use of new, cutting-edge technologies, such as artificial intelligence.
Panelists in last week’s webinar, which marked the kicked off RegTech 2021 Series, presented by Donnelley Financial Solutions, provided advice to the government from private sector experts, emphasizing the value of AI for everyday uses and a wide variety of uses. These experts set expectations for what AI can be used for, discussed challenges in scaling up pilot projects, as well as the government’s unique place to push for standardized, structured content.
Learn more about the RegTech Series here and join us for the remainder of the series by registering for our next event, where we will hear from government experts.